Readers' comments

sp6erunderrated - The stability and pensions were a nice ponzi scheme that was sold to generations of workers and is now unmasked as a fleeting myth that seemed real only due to some demographic and political one-offs. And it's not like it's gotten us great results these last several decades, anyway.

jomiku, I have to agree with Pacer, I think that Americans' will be more than happy to see people get paid whatever a free market will bear.

There are two main reasons why unions don't like the idea of exchanging benefits for increased pay. As pointed out, when a benefit is front loaded, you can end up with a more fluid workforce as workers continuously gravitate to hire paying positions (since they are not shackled to an employer for a lifetime just for the pension). A fluid workforce is not conducive to unionization, since the membership is not as stable, the enthusiasm and loyalty are not as intense, and there is less for the union to effectively bargain over.

A front-loaded pay incentive is also dangerous for unions -- they thrive on the fiction that workers are all equal except for time-in-service, and that pay should therefore be based on seniority. If you front-load pay and let the market attract the best and brightest, then you will naturally create potential pay variances among the workers (even those with the same number of years on the job). When the workforce itself is fractured into haves versus have-nots, then it is impossible to maintain the necessary group solidarity that a union relies upon.

jomiku - Focusing on the actual number ($80k in your example) may not be useful because of the wide cost of living variance (New Yorkers would probably not flinch a bit at $80k, when emergency responders there average 50% more and work a comparable number of scheduled hours annually).

The public would probably be fine with paying teachers $80k (or its local equivalent) but the unions would have to 'eat their arm' a bit by sacrificing the job security of the stereotypical burnt-out, checked-out tenured teacher--however many of those exist. That on top of the already-ripe issue of transitioning younger teachers to defined contribution plans and the higher short-term costs associated with that. Not an easy road for the politician whose instinct is to compromise with labor/unions and avoid tax increases at all costs.

On the bright side, charter schools are already experimenting with some of these things (and other controversial approaches) and their record of results just gets longer and longer and harder to ignore--even if subject to mitigating factors such as cherry-picking of students.

"The value of this income stream, not even assuming the inflation adjustment, is about $725,000. The average 401(k) balance at retirement for someone who earns that much is a fraction of that."

I am curious as to the validity of this statement - a quick calculation suggests that if the worker put away 6% of his $60k paycheck, and had that matched by his employer (fairly standard practice, I think..) he would have $7200 in 401(k) contributions per year. Growing at 6% for 35 years would garner him over the $750k mark. Do people just not save as much in 401(k)'s?

Hmm. But in the case of bank executives, we're saying that part of the solution is to hold back on compensation until we see what the true value of what they've done turns out to be. Applying that same idea to teachers might be interesting. Probably completely unworkable, but interesting...

I'm for any steps in the direction of paying for current services in the current period. 90% of the problems we're having are due to the disconnect between the services being provided (today) and the taxation to pay for those services (deferred to the future, whether pensions or baked-in salary increases, or rules that allow underperformers to stay on and accumulate like scar tissue where there needs to be blood and muscle).

I always hear that government workers make a compromise - less pay for better retirement benefits. Yet in many fields this isn't true; government union workers get to have their cake and eat it too. The pay is higher than in the private sector, the benefits are obscene, the pension generous and iron-clad.

Where else can someone with a high-school diploman make $50k-$60k a year sitting in a box chatting with coworkers all day except as a low-level union worker for BART in the Bay Area. Answer a few questions a day, do a tiny bit of maintenance, but for the most part sit down in a glass cube, read and BS.

EXCEPT, in capital letters, unions know that society won't allow teachers to be paid 80k a year. It's a great idea except unions rightly fear the result will be no pension and salaries not increasing. Blunt truth: society doesn't value teachers. We talk about how they should be valued but we don't actually want to pay those wages. You'll hear all sorts of arguments: they work shorter days (true, except for all the work they need to do outside of school), they get summer off and school vacations off, so why pay them as much or more than I get?

Blame the teachers' union for being anti-progressive but there is an implicit condition in your argument that you've assumed: that society will pay these salaries. You've constructed a causal chain built on that assumption but you didn't bring it up, let alone analyze it. I'm not saying this isn't possible but if I were grading your work I'd send you back to redo it because you have no foundation.

Completely agree with this. There's huge problems with the backloaded pay structure in the public sector. As a current public sector employee that's moving to another state I'm experiencing this directly. On the one hand this saves the public quite a bit of money because there's a lot of people like me getting shafted as well as doing what it's supposed to do and preventing state jobs from being attractive enough to function as a sinecure for pols to hand out but it also discourages talented people from wanting to spend a short time in state service and discourages people who expect to be mobile from even trying (they could at least make it easier to move between different state systems at the very least, why can't my NY pension be transferred to Ohio?).

It's a mess, and its bad for young workers who expect to move careers several times. Few of us want to be lifers somewhere. This is of course very bad for public employee unions, who are not set up to deal with this type of worker. There's only so much they can do to shift the incentives to favor the kind of worker they want, sooner or later they will have to adapt.

This is right on. As someone who's working at a high-paying executive private-sector job, I would love to try opportunities in the public sector for a few years. If I were happy after a few years, I would consider making it my long-term career. It would be less costly for me to attempt the switch if benefits were more front-loaded. This would lead to more potential people like me attempting to enter the public workforce.

On the other hand, you could make the case that backloading benefits means there will be less of the "revolving door."

A six-month Dayton Daily News examination found large percentages of employees in some local jurisdictions retired on disability, including nearly half of Dayton police officers and firefighters who retired between 2000 and 2010, and nearly 33 percent of Montgomery County sheriff’s deputies.

"UNIONS have given America fair warning. Cutting the generous pension benefits of state employees may discourage people from a career in public service, thereby lowering public worker quality."

Yeah, yeah. And if we don't give the guys at AIG their bonuses, they won't be able to unwind the mess they created in the first place. And if we don't pay GE for a second F-35 engine, the Chinese will rule the world. And if we don't keep passing the Patriot Act, we'll all be living under Sharia law.

Welcome to the United States of Gimme. Gimme more money! Gimme more power! Just gimme! I'm beginning to think that Frank Sobotka was right:

"We used to make shit in this country, build shit. Now we just put our hand in the next guy's pocket."

Great point AS, not to mention that front loading payments makes the costs more certain and reduces the potential for future shortages based on accounting gimmicks and under-investment in pension programs. Hopefully Klein's ideas get used by other districts that are less rigid.